CITY NATONAL BANK LOAN FEE AND CHARGES
EXHIBIT
10.1
| City National Bank |
This Credit
Agreement (the "Agreement"), dated as of the 1st
day of May, 2008 ("Loan Date") is between City National Bank, a national
banking association ("CNB") and PRI MEDICAL TECHNOLOGIES, INC., a Nevada
corporation ("Borrower").
1. DEFINITIONS.
As used in this Agreement, these terms have the following meanings:
1.1.
"Account" or "Accounts" has the meaning given in the Code, and includes, but is
not limited to, any right to payment for goods sold or leased or for services
rendered which is not evidenced by an instrument or chattel paper from any
Person, whether now existing or hereafter arising or acquired, whether or not it
has been earned by performance.
1.2."Account
Debtor" means the Person obligated on an Account.
1.3.
"Affiliate" means any Person directly or indirectly controlling, controlled by,
or under common control with Borrower, and includes any employee stock ownership
plan of Borrower or an Affiliate. "Control" (including with correlative meaning,
the terms "controlling," "controlled by" and "under common control with"), as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person, whether through the ownership of voting securities, by contract or
otherwise.
1.4.
"Borrower's Loan Account" means the statement of daily balances on the books of
CNB in which will be recorded Loans made by CNB to Borrower, payments made on
such loans, and other appropriate debits and credits as provided by this
Agreement. CNB will provide a statement of account for Borrower's Loan Account
at least once each month on a date established by CNB, which statement will be
accepted by and conclusively binding upon Borrower unless it notifies CNB in
writing to the contrary, within five (5) days of receipt of such statement, or
ten (10) days after sending of such statement if Borrower does not notify CNB of
its non-receipt of the statement. Statements regarding other credit extended to
Borrower will be provided separately.
1.5. "Cash
Flow from Operations" will be determined on a consolidated basis for Borrower
and the Subsidiaries and mean the sum of (a) net income after taxes, after
deducting the amount of dividends declared to Borrower's shareholders earned
over the twelve-month period ending on the date of determination, plus (b)
amortization of intangible assets, plus (c) interest expense, plus (d)
depreciation expensed during the twelve-month period ending on the date of
determination, plus (e) the net change of minority interests as reflected on
Borrower's balance sheet from the date of determination to the date twelve
months earlier, less (f) deferred tax valuation allowance during the
twelve-month period ending on the date of determination.
1.6. "Code"
means the Uniform Commercial Code of California, as currently in effect and as
amended and replaced from time to time, except where the Uniform Commercial Code
of another state governs the perfection of a security interest in Collateral
located in that state.
1.7. "Collateral"
means all property securing the Obligations, as described in Section
8.
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| City National Bank |
1.8.
"Commitment" means CNB's commitment to make the Loans in the aggregate principal
amount outstanding at any one time of up to ONE MILLION AND NOMOOTHS DOLLARS
($1,000,000.00).
1.9. "Debt"
means, at any date, the aggregate amount of, without duplication, (a) all
obligations of Borrower or any Subsidiary for borrowed money, (b) all
obligations of Borrower or any Subsidiary evidenced by bonds, debentures, notes
or other similar instruments, (c) all obligations of Borrower or any Subsidiary
to pay the deferred purchase price of property or services, (d) all capitalized
lease obligations of Borrower or any Subsidiary, (e) all obligations or
liabilities of others secured by a lien on any asset of Borrower or any
Subsidiary, whether or not such obligation or liability is assumed, (f) all
obligations guaranteed by Borrower or any Subsidiary, (g) all obligations,
direct or indirect, for letters of credit, and (h) any other obligations or
liabilities which are required by GAAP to be shown as liabilities on the balance
sheet of Borrower or any Subsidiary.
1.10. "Debt
Service" means (a) the aggregate amount of Current Maturity of Long Term Debt
plus (b) all interest incurred on borrowed money, determined by reference to the
most recently ended fiscal quarter and the immediately preceding three fiscal
quarters. "Current Maturity of Long Term Debt" means that portion of Borrower's
consolidated long term liabilities, determined in accordance with GAAP, which
shall, by the terms thereof, become due and payable within one (1) year
following the date of the balance sheet upon which such calculations are
based.
1.11. "Demand
Deposit Account" means Borrower's demand deposit account no.
412-936027 maintained with CNB.
1.12. "GAAP"
means generally accepted accounting principles, consistently
applied.
1.13. "Guarantor"
is EMERGENT GROUP INC., a Nevada corporation.
1.14. "Inventory"
means goods held for sale or lease in the ordinary course of business,
work in process and any and all raw materials used in connection with the
foregoing.
1.15. "Loan"
or "Loans" means the loans extended by CNB to Borrower pursuant
to Section 2.
1.16. "Loan Documents" means,
individually and collectively, this Agreement, any Note, guaranty, security or
pledge agreement, financing statement and all other contracts, instruments,
addenda and documents executed in connection with or related to extensions of
credit under this Agreement.
1.17."Notes"
means the Note(s) referenced in Section 2.
1.18.
"Obligations" means all present and future liabilities and obligations of
Borrower to CNB hereunder and all other liabilities and obligations of Borrower
to CNB of every kind, now existing or hereafter owing, matured or unmatured,
direct or indirect, absolute or contingent, joint or several, including any
extensions and renewals thereof and substitutions therefore.
1.19."Person"
means any individual or entity.
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1.20."Prime
Loan" means any Loan tied to the Prime Rate.
1.21.
"Prime Rate" means the rate most recently announced by CNB at its principal
office in Beverly Hills, California as its "Prime Rate." Any change in the
interest rate resulting from a change in the Prime Rate will become effective on
the day on which each change in the Prime Rate is announced by CNB.
1.22.
"Revolving Credit Commitment" means CNB's commitment to make the Revolving
Credit Loans in the aggregate principal amount at any one time of up to ONE
MILLION AND NO/100THS DOLLARS ($1,000,000.00).
1.23. "Subsidiary"
means any Person, the majority of whose voting interests are at any
time owned, directly or indirectly, by Borrower and/or by one or more
Subsidiaries.
1.24. "Tangible
Net Worth" means the total of all assets appearing on a balance sheet
prepared in accordance with GAAP for Borrower and the Subsidiaries on
a
consolidated
basis, minus (a) all intangible assets, including, without limitation,
unamortized debt discount, Affiliate, employee, officer and stockholder
receivables or advances, goodwill, research and development costs, patents,
trademarks, the excess of purchase price over underlying values of acquired
companies, any covenants not to compete, deferred charges, copyrights,
franchises and appraisal surplus; minus (b) all obligations which are required
by GAAP to be classified as a liability on the consolidated balance sheet of
Borrower and the Subsidiaries; minus (c) the amount, if any, at which shares of
stock of a non-wholly owned Subsidiary appear on the asset side of Borrower's
consolidated balance sheet, as determined in accordance with GAAP; plus (d) with
the amount of minority interest as reflected on the balance sheet, minus (e)
deferred income and reserves not otherwise classified as a liability on the
consolidated balance sheet of Borrower and the Subsidiaries.
1.25.
"Termination Date" means June 3, 2009. Notwithstanding the foregoing, CNB may,
at its option, terminate this Agreement pursuant to the Section entitled "CNB's
Remedies"; the date of any such termination will become the Termination Date as
that term is used in this Agreement.
1.26.
"Total Senior Liabilities" means, as of any date of determination, the amount of
all liabilities that should be reflected as a liability on a consolidated
balance sheet of Borrower and the Subsidiaries prepared in accordance with GAAP,
less Subordinated Debt.
2.THE
CREDIT.
2.1.
Revolving
Credit Loan. Subject to the terms of this Agreement, CNB agrees to make
loans ("Revolving Credit Loans") to Borrower, from the date of this Agreement up
to and including the Termination Date, at such times as Borrower may request, up
to the amount of the Revolving Credit Commitment. The Revolving Credit Loans may
be repaid and reborrowed at any time up and including the Termination Date.
Borrower will have a period of not less than thirty (30) consecutive days during
the twelve month period ending with each anniversary date of this Agreement
during which time there will be no outstanding Revolving Credit
Loans.
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2.1.1.
Procedure for Revolving
Credit Loans. Each Revolving Credit Loan may be made by CNB at the oral
or written request of anyone who is authorized in writing by Borrower to request
Revolving Credit Loans until written notice of the revocation of such authority
is received by CNB.
2.1.2.
Interest. The Revolving Credit Loans will bear interest from disbursement until
due (whether at stated maturity, by acceleration or otherwise) at a fluctuating
rate equal to the Prime Rate plus one-half of one percent (+.50%) per year.
Interest on the Revolving Credit Loans and other charges incurred under this
Agreement will be payable monthly in arrears on the third (3rd) day of each
month for the previous month, commencing on the first such date after the date
hereof, and on the Termination Date.
2.2.
Default Interest Rate.
From and after written notice by CNB to Borrower of the occurrence of an
Event of Default (and without constituting a waiver of such Event of Default),
the Loans and any other amounts due CNB hereunder (and interest to the extent
permitted by law) will bear additional interest at a fluctuating rate equal to
five percent (5.0%) per year higher than the interest rate as determined in the
above Section(s) 2.1.2 until the Event of Default has been cured. All interest
provided for in this Section will be compounded monthly and payable on
demand.
2.3.
Loans and Payments.
All payments will be in United States Dollars and in immediately
available funds. Interest will be computed on the basis of a 360 day year,
actual days elapsed. All payments of principal, interest, fees and other charges
on the Loans will be made by charging, and Borrower hereby authorizes CNB to
charge, the Borrower's Demand Deposit Account for the amount of each such
payment. Borrower must have sufficient collected balances in the Borrower's
Demand Deposit Account in order that each such payment will be available when
due. CNB is authorized to note the date, amount and interest rate of each Loan
and each payment of principal and interest on CNB's books and records, which
notations will constitute presumptive evidence of the accuracy of the
information noted. Any Loan will be conclusively presumed to have been made to
or for the benefit of Borrower when CNB, in its sole discretion, believes that
the request therefore has been made by authorized persons (whether in fact that
is the case), or when the Loan is deposited to the Borrower's Demand Deposit
Account, regardless of whether any Person other than Borrower may have authority
to draw against such account.
2.4.
Late Charge.
Borrower shall pay a late charge of 5% or $10.00, whichever is greater,
of any payment not received by CNB on or before the 10th day after the payment
is due.
3.TERM AND
TERMINATION.
3.1.
Establishment
of Termination Date. The term of this Agreement will begin as of the date
hereof and continue until the Termination Date, unless the term is renewed for
an additional period by CNB giving Borrower prior written notice, in which event
the Termination Date will mean the renewed maturity date set forth in such
notice. Notwithstanding the foregoing, CNB may, at its option, terminate this
Agreement pursuant to Section 9.3; the date of any such termination will become
the Termination Date as that term is used in this Agreement.
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3.2. Obligations Upon the
Termination Date. Borrower will, upon the Termination
Date:
3.2.1.
Repay the amount of the balance due as set forth in Borrower's Loan Account plus
any accrued interest, fees and charges; and
3.2.2.
Apart from those leases made by CNB unless the Termination Date occurs because
of the occurrence on an Event of Default, pay the amounts due on all other
Obligations owing to CNB, with the Termination Date becoming the maturity date
of such other Obligations.
3.3.
Survival
of Rights.
Any termination of this Agreement will not affect the rights, liabilities
and obligations of the parties with respect to any Obligations outstanding on
the date of such termination. Until all Obligations, arising under this
Agreement but excluding leases between Borrower and CNB, have been fully repaid,
CNB will retain its security interest in all existing Collateral and Collateral
arising thereafter, and Borrower will continue to assign all Accounts to CNB and
to immediately turn over to CNB, in kind, all collections received on the
Accounts.
4.CONDITIONS
PRECEDENT.
4.1.
Extension of Credit.
The obligation of CNB to make any Loan or other extension of credit
hereunder is subject to CNB's receipt of each of the following, in form and
substance satisfactory to CNB, and duly executed as required by
CNB:
4.1.1.
All Loan Documents required by CNB, including but not limited to this Agreement
and any guaranties required hereunder;
4.1.2. A
copy of Borrower's organizational and governing documents and any public filings
made in connection therewith; and (b) such authorizations and resolutions
approving and authorizing the execution, delivery and performance of this
Agreement and any other documents required pursuant to this Agreement, as may be
required by CNB;
4.1.3. A
copy of the organizational and governing documents of EMERGENT GROUP INC., a
Nevada corporation and any public filings made in connection therewith; and (b)
such authorizations and resolutions of EMERGENT GROUP INC., a Nevada corporation
approving and authorizing the execution, delivery and performance of its
continuing guaranty, as may be required by CNB;
4.1.4.
Evidence that the insurance required by Section 6.5 hereof is in effect;
and
4.1.5. A
complete list of claims made against Borrower, any Subsidiary or any Guarantor,
and evidence satisfactory to CNB, including, if requested, an opinion of
Borrower's counsel with respect to any such claim(s), that if such claim(s) is
adversely determined, it would not have a material adverse effect on the
business, operations or condition, financial or otherwise, of Borrower, any
Guarantor or any Subsidiary.
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| City National Bank |
4.2.
Conditions to Each
Extension of Credit. The obligation of CNB to make any Loan or other
extension of credit hereunder will be subject to the fulfillment of each of the
following conditions to CNB's satisfaction:
4.2.1.
The representations and warranties of Borrower set forth in Section 5 will be
true and correct on the date of the making of each Loan or other extension of
credit with the same effect as though such representations and warranties had
been made on and as of such date;
4.2.2. No
Guarantor will have revoked his, her or its guaranty and no such guaranty will
have become otherwise unenforceable with respect to future
advances;
4.2.3. No
holder of Subordinated Debt will be in violation of his, her or its
Subordination Agreement executed in favor of CNB, and such Subordination
Agreement is enforceable with respect to future advances;
4.2.4.
There will be in full force and effect in favor of CNB a legal, valid and
enforceable first security interest in, and a valid and binding first lien on
the Collateral; and CNB will have received evidence, in form and substance
acceptable to CNB, that all filings, recordings and other actions that are
necessary or advisable, in the opinion of CNB, in order to establish, protect,
preserve and perfect CNB's security interests and liens as legal, valid and
enforceable first security interests and liens in the Collateral have been
effected;
4.2.5.
There will have occurred no Event of Default, whether or not subject to cure;
and
4.2.6.
All other documents and legal matters in connection with the transactions
described in this Agreement will be satisfactory in form and substance to
CNB.
5. REPRESENTATIONS
AND WARRANTIES. Borrower represents and warrants (and each request for a
Loan or other extension of credit will be deemed a representation and warranty
made on the date of such request) that:
5.1.
Existence,
Power and Authorization. Borrower and each Subsidiary is duly organized,
validly existing and in good standing under the laws of the state of its
organization, and is duly qualified to conduct business in each jurisdiction in
which its business is conducted. The execution, delivery and performance of all
Loan Documents executed by Borrower are within Borrower's powers and have been
duly authorized by the Borrower and do not require any consent or approval of
the owners of Borrower.
5.2. Binding Agreement.
The Loan Documents constitute the valid and legally binding
obligations of Borrower, enforceable against Borrower in accordance with their
terms.
5.3.
Ancillary Documents.
To the extent that any security agreement, subordination agreement or
guaranty is required to be executed by a Subsidiary or Affiliate, the
representations and warranties set forth in Sections 5.1 and 5.2 are also true
and correct with respect to such Subsidiary and Affiliate and such
document.
5.4. Other Agreements. The
execution and performance of the Loan Documents
will not violate any provision of law or regulation (including, without
limitation, Regulations
X and U of the Federal Reserve Board) or any order of any governmental
authority, court, or arbitration board or the organizational and governing
documents of Borrower, or result in the breach of, constitute a default under,
contravene any provisions of, or result in the creation of any security
interest, lien, charge or encumbrance upon any of the assets of Borrower
pursuant to any indenture or agreement to which Borrower or any of its
properties is bound, except liens and security interests in favor of
CNB.
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5.5.
Litigation.
There is no litigation, tax claim, investigation or proceeding pending,
threatened against or affecting Borrower, any Guarantor or Subsidiary, or any of
their respective properties which, if adversely determined, would have a
material adverse effect on the business, operation or condition, financial or
otherwise, of Borrower or any Guarantor or Subsidiary. (for the purposes of this
section "material adverse effect" shall mean the amount in controversy is at
least $50,000.00)
5.6.
Financial Condition.
The most recent financial statements of Borrower and each Guarantor, if
any, copies of which have been delivered to CNB, have been prepared in
accordance with GAAP and are true, complete and correct and fairly present the
financial condition of Borrower, its Subsidiaries and each Guarantor, including
operating results, as of the accounting period referenced therein. There has
been no material adverse change in the financial condition or business of
Borrower or any Subsidiary or Guarantor since the date of such financial
statements. Neither Borrower nor any Subsidiary or Guarantor has any material
liabilities for taxes or long-term leases or commitments, except as disclosed in
the financial statements.
5.7.
No Violations.
Borrower is not, nor is any Subsidiary, in violation of any law,
ordinance, rule or regulation to which it or any of its properties is subject to
the best of Borrower's knowledge.
5.8.
Collateral.
Borrower owns and has possession of and has the right and power to grant
a security interest in the Collateral, and the Collateral is genuine and free
from liens, adverse claims, set-offs, defaults, prepayments, defenses and
encumbrances except those in favor of CNB, except for (i) such Collateral which
has been leased to an Affiliate and (ii) such Collateral which has been leased
from a third party lessor. No bills of lading, warehouse receipts or other
documents or instruments of title are outstanding with respect to the Collateral
or any portion of the Collateral, in favor of a Person other than Borrower. The
office where Borrower keeps its records concerning all Accounts and where it
keeps the bulk of its Inventory is ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇.
5.9. ERISA.
To the best of Borrower's knowledge, Borrower is in compliance
in all
material respects with all applicable provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA"). No "Reportable Event" (as defined in
ERISA and the regulations issued thereunder) has occurred with respect to any
benefit plan of Borrower nor are there any unfunded vested liabilities under any
benefit plan of Borrower. Borrower has met its minimum funding requirements
under ERISA with respect to each of its plans and has not incurred any material
liability to the Pension Benefit Guaranty Corporation ("PBGC") in connection
with any such plan.
5.10.
Consents. No
consent, license, permit, or authorization of, exemption by, notice or report
to, or registration, filing or declaration with, any governmental authority or
agency is required in connection with the execution, delivery and performance by
Borrower of this Agreement or the transactions contemplated hereby.
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5.11.
Use
of Proceeds.
The proceeds of the Revolving Credit Loan will be used by Borrower solely
for working capital, fund dividends and acquisition purposes in the normal
course of business.
5.12.
Regulation U.
Borrower is not engaged principally, or as one of its principal
activities, in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations U or X of the Federal
Reserve Board). No part of the proceeds of the Loans will be used by Borrower to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying such margin stock.
5.13.
Environmental
Matters.
5.13.1.
The operations of Borrower and each Subsidiary, to the best of Borrower's
knowledge, comply in all material respects with all applicable federal, state
and local environmental, health and safety statutes, regulations and ordinances
and fully comply with all terms of all required permits and
licenses.
5.13.2.
Borrower and each Subsidiary have received no notices of threatened or pending
governmental or private civil, criminal or administrative proceeding regarding
any environmental or health and safety statute, regulation or ordinance and have
not been subject to any federal, state or local investigations, inspections or
orders regarding any environmental or health and safety statute, regulation or
ordinance.
5.13.3.
Neither Borrower nor any Subsidiary knows of any facts or conditions which may
exist which may subject Borrower or any Subsidiary to liability or contingent
liability and neither Borrower nor any Subsidiary is presently liable or
contingently liable for any removal, remedial, response or other costs or
damages in connection with any release into the environment of toxic or
hazardous substances or waste included on any federal, state or local hazardous
chemical or substance lists under any federal, state or local statute,
regulation or ordinance.
5.13.4.
Borrower will, at all times, defend and indemnify and hold CNB (which for
purposes of this Section includes CNB's parent company and subsidiaries and all
of their respective shareholders, directors, officers, employees, agents,
representatives, successors, attorneys and assigns) harmless from and
against any liabilities, claims, demands, causes of action, losses, damages,
expenses (including without limitation reasonable attorneys' fees, which
attorneys may be employees of CNB, or may be outside counsel), costs,
settlements, judgments or recoveries directly or indirectly arising out of or
attributable to the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal, or presence of a hazardous substance
on, under, or about Borrower's property or operations or property leased to or
used by Borrower. For these purposes, the term "hazardous substances" means any
substance which is or becomes designated as "hazardous" or "toxic" under any
Federal, state, or local law. Any obligation or liability of Borrower to CNB
under this Section will survive the expiration or termination of this Agreement
and the repayment of all Loans and the payment or performance of all other
Obligations of Borrower to CNB.
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6. AFFIRMATIVE
COVENANTS. Borrower agrees that until payment in full of all Obligations,
Borrower will comply with the following covenants:
6.1.
Books and Records.
Borrower will maintain, in accord with sound accounting practices,
accurate records and books of account showing, among other things, all Inventory
and Accounts, the proceeds of the sale or other disposition thereof and the
collections therefrom. Borrower will not change the accounting method used to
determine Borrower's Inventory cost without notification to CNB. Borrower will
permit representative(s) of CNB, at any reasonable time, to inspect, audit,
examine and make extracts or copies from all books, records and other data
relating to the Collateral, to inspect any of Borrower's properties and to
confirm balances due on Accounts by direct inquiry to Account Debtors, and will
give CNB, promptly upon request, all information regarding the business or
finances of Borrower.
6.2. Financial Statements of
Borrower. Borrower will furnish to CNB on acontinuing
basis:
6.2.1.
Within sixty (60) days after the end of each quarterly accounting period of each
fiscal year, a financial statement, consolidated with Guarantor, consisting of
not less than a balance sheet and income statement, prepared in accordance with
GAAP and accompanied by the following: (a) upon request supporting schedules of
costs of goods sold, operating expenses and other income and expense items, and
(b) Borrower's certification as to whether any event has occurred which
constitutes an Event of Default, whether or not subject to cure, and if so,
stating the facts with respect thereto, which financial statement may be
internally prepared;
6.2.2.
Within one hundred twenty (120) days after the close of Borrower's fiscal year,
a copy of the annual audit report for Borrower and Subsidiaries, including
therein, consolidated with Guarantor, a balance sheet, income statement,
reconciliation of net worth and statement of cash flows, with notes thereto, the
balance sheet, income statement and statement of cash flows to be audited by a
certified public accountant acceptable to CNB, certified by such accountant to
have been prepared in accordance with GAAP and accompanied by the following: (a)
supporting schedules of costs of goods sold, operating expenses and other income
and expense items, and (b) Borrower's certification as to whether any event has
occurred which constitutes an Event of Default, whether or not subject to cure,
and if so, stating the facts with respect thereto;
6.2.3.
Within sixty (60) days after the end of each fiscal quarter, a listing and aging
of all accounts receivable and accounts payable together with, upon CNB's
request, a current list of the names and addresses of all Account Debtors;
and
6.2.4.
Such additional information, reports and/or statements as CNB may, from time to
time, reasonably request.
6.3. Account Balances.
Borrower will maintain its operating accounts at CNB at
all times.
6.4.
Taxes
and Premiums.
Borrower will, and will cause each Subsidiary to, pay and discharge all
taxes, assessments, governmental charges and real and personal property taxes,
including, but not limited to, federal and state income taxes, employee
withholding taxes and payroll taxes, and all premiums for insurance required
under this Agreement,
prior to the date upon which penalties are attached thereto, except for such
items which are being contested in good faith in appropriate
proceeds.
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CREDIT
AGREEMENT
|
▇.▇.▇▇▇▇▇▇▇▇▇.
6.5.1.
Borrower will, and will cause each Subsidiary to, provide and maintain the
insurance required under the Loan Documents;
6.5.2. In
addition to the insurance required above, Borrower will, and will cause each
Subsidiary to, maintain insurance of the types and in amounts customarily
carried in its lines of business, including, but not limited to, fire, public
liability (with CNB named as additional insured), property damage, business
interruption and worker's compensation, such insurance to be carried with
companies and in amounts satisfactory to CNB, and will deliver to CNB from time
to time, upon CNB's request, schedules setting forth all insurance then in
effect; and
6.5.3. If
Borrower fails to provide, maintain, or furnish to CNB the policies required by
this Section, CNB may immediately procure such insurance or other insurance
necessary to protect CNB's interest, and Borrower will pay all premiums thereon
promptly upon demand by CNB, together with interest, at the highest rate
provided for any of the Loans extended under Section 2 above, from the date of
expenditure, and if not paid within ten (10) days of CNB's demand therefore (and
without constituting a waiver of an Event of Default), at a rate five percent
(5%) per year higher than such interest rate until such amount (and interest
thereon, to the extent permitted by law), is paid in full.
6.6.
Notice.
Borrower will promptly advise CNB in writing of (a) the opening of any
new, or the closing of any existing, places of business, each location at which
Inventory or equipment is or will be kept, and any change of Borrower's name,
trade name or other name under which it does business or of any such new or
additional name; (b) the occurrence of any Event of Default, whether or not
subject to cure; (c) any litigation pending or threatened against Borrower, any
Subsidiary or any Guarantor where the amount or amounts in controversy exceed
FIFTY THOUSAND AND NO/100THS DOLLARS ($50,000.00); (d) any unpaid taxes of
Borrower, any Subsidiary or any Guarantor, which are more than fifteen (15) days
delinquent; and (e) any other matter which might materially or adversely affect
Borrower's or any Subsidiary's or Guarantor's financial condition, property or
business.
6.7.
Fair Labor Standards
Act. Borrower
will, and will cause each Subsidiary to, comply with the requirements of,
and all regulations promulgated under, the Fair Labor Standards Act of 1938 (29
U.S.C. Code Section 201 et seq.).
6.8.
Corporate Existence.
Borrower
will, and will cause each Subsidiary to, maintain its corporate existence
and all of its rights, privileges and franchises necessary or desirable in the
normal course of its business.
6.9.
Compliance with Law.
Borrower
will, and will cause each Subsidiary to, comply with all requirements of
all applicable laws, rules, regulations, orders of any governmental agency and
all material agreements to which they are a party.
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6.10.Borrower's Financial Tests.
Borrower will maintain:
6.10.1
Tangible Net Worth plus Subordinated Debt of not less than $2,500,000.00 at all
times;
6.10.2. A
ratio of Total Senior Liabilities to Tangible Net Worth plus Subordinated Debt
of not more than 4.0 to 1 at all times;
6.10.3. A
ratio of Cash Flow from Operations to Debt Service of not less than 1.2 to 1 at
all times; and
6.10.4.
No two (2) consecutive quarterly losses.
7. NEGATIVE COVENANTS.
Borrower agrees that until payment in full of all the Obligations,
Borrower will not, nor will it permit any Subsidiary to, do any of the
following, without CNB's prior written consent:
7.1.
Borrowing.
Create, incur, assume or permit to exist any Debt except (a) Debt to
CNB,(b) trade Debt in the ordinary course of Borrower's business and (c)
purchase money Debt in an aggregate amount not to exceed $1,500,000.00 per
Borrower's fiscal year incurred in connection with the acquisition of capital
assets (including capitalized lease expenditures).
7.2.
Sale of Assets.
Sell, lease or otherwise dispose of any of Borrower's or any Subsidiary's
assets, other than (i) in the ordinary course if business, (ii) disposal of
equipment and vehicles which are obsolete or no longer needed in the operation
of Borrower's business.
7.3.
Loans. Make
loans or advances to any Person that exceeds in the aggregate of $500,000.00 at
any time, except credit extended to employees or to customers in the ordinary
course of business.
7.4. Contingent
Liabilities. Assume, guarantee, endorse, contingently
agree to purchase
or otherwise become liable for the obligation of any Person, including
Borrower,
a Subsidiary or Affiliate, except (a) by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business, (b) such obligations in amounts not to exceed $500,000.00 in
the aggregate, and (c) contingent liabilities in favor of
CNB.
7.5. Mortgages,
Liens, etc. Mortgage, pledge, hypothecate,
grant or contract to grant any security interest of any kind in any property or
assets, to anyone except CNB or third party equipment lessors.
7.6.
Involuntary Liens. Permit
any involuntary liens to arise with respect to any property or assets including
but not limited to those arising from the levy of a writ of attachment or
execution, or the levy of any state or federal tax lien which lien will not be
removed within a period of thirty (30) days.
7.7.
Sale and Leaseback. Enter
into any sale-leaseback transaction.
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7.8.
Event of Default.
Permit a default to occur under any document or instrument evidencing
Debt incurred under any indenture, agreement or other instrument under which
such Debt may be issued, or any event to occur under any of the foregoing which
would permit any holder of the Debt outstanding thereunder to declare the same
due and payable before its stated maturity, whether or not such acceleration
occurs or such default be waived.
▇.▇▇▇▇▇▇▇▇
AGREEMENT.
8.1.
Grant of
Security Interest. To secure
all Obligations hereunder as well as all other Obligations to CNB, Borrower
hereby grants and transfers to CNB a continuing security interest in the
following property whether now owned or hereafter acquired:
8.1.1.
All of Borrower's Inventory; 8.1.2. All of Borrower's Accounts;
8.1.3.
All of Borrower's general intangibles as that term is defined in the
Code;
8.1.4. All of Borrower's equipment, as that term is defined in the
Code;
8.1.5.
All of Borrower's interest in any patents (now existing or pending), copyrights,
trade names, trademarks and service marks useful to the operation of Borrower's
business;
8.1.6.
All notes, drafts, acceptances, instruments, documents of title, policies and
certificates of insurance, chattel paper, guaranties and securities now or
hereafter received by Borrower or in which Borrower has or acquires an
interest;
8.1.7.
All cash and noncash proceeds of the foregoing property, including, without
limitation, proceeds of policies of fire, credit or other
insurance;
8.1.8.
All of Borrower's books and records pertaining to any of the Collateral
described in this Section 8.1; and
8.1.9.
Any other Collateral which CNB and Borrower may designate as additional security
from time to time by separate instruments.
8.2.
Notification of
Account Debtors. CNB will have the right to notify any Account Debtor to
make payments directly to CNB, take control of the cash and noncash proceeds of
any Account, and settle any Account, which right CNB may exercise at any time
upon the occurrence of an Event of Default, whether or not subject to cure,
whether of not Borrower was theretofore making collections thereon.
8.3.
Attorney-In-Fact.
Upon the occurrence of an Event of Default, whether or not subject to
cure, CNB or any of its officers is hereby irrevocably made the true and lawful
attorney for Borrower with full power of substitution to do the following: (a)
endorse the name of Borrower upon any and all checks, drafts, money orders and
other instruments for the payment of moneys which are payable to Borrower and
constitute collections on Accounts; (b) execute in the name of Borrower any
schedules, assignments,
instruments, documents and statements which Borrower is obligated to give CNB
hereunder; (c) receive, open and dispose of all mail addressed to Borrower; (d)
notify the Post Office authorities to change the address for delivery of mail
addressed to Borrower to such address as CNB will designate; and (e) do such
other acts in the name of Borrower which CNB may deem necessary or desirable to
enforce any Account or other Collateral. The powers granted CNB hereunder are
solely to protect its interests in the Collateral and will not impose any duty
upon CNB to exercise any such powers.
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9. EVENTS OF
DEFAULT.
9.1. Events
of Default.
After expiration of any applicable cure period set forth
in
Section 9.2, the following will constitute Events of Default under this
Agreement:
9.1.1.
Borrower fails to pay when due any installment of principal or interest or any
other amount payable under this Agreement;
9.1.2.
Any Person, or any Subsidiary of any Person, which is a party to any Loan
Document fails to perform or observe any of the terms, provisions, covenants,
conditions, agreements or obligations contained in the Loan
Documents;
9.1.3.
The entry of an order for relief or the filing of an involuntary petition with
respect to Borrower, any Subsidiary or any Guarantor under the United States
Bankruptcy Code, the appointment of a receiver, trustee, custodian or liquidator
of or for any part of the assets or property of Borrower, any Subsidiary or any
Guarantor, or Borrower, any Subsidiary or any Guarantor makes a general
assignment for the benefit of creditors;
9.1.4.
Any financial statement, representation or warranty made or furnished by
Borrower, any Subsidiary or any Guarantor in connection with the Loan Documents
proves to be in any material respect incorrect;
9.1.5.
CNB's security interest in or lien on any portion of any Collateral becomes
impaired or otherwise unenforceable;
9.1.6.
Any Person obtains an order or decree in any court of competent jurisdiction
enjoining or prohibiting Borrower or CNB or either of them from performing this
Agreement, and such proceedings are not dismissed or such decree is not vacated
within ten (10) days after the granting thereof;
9.1.7.
Borrower or any Subsidiary neglects, fails or refuses to keep in full force and
effect any governmental permit or approval which is necessary to the operation
of its business;
9.1.8.
All or substantially all of the property of Borrower, any Guarantor or any
Subsidiary is condemned, seized or otherwise appropriated;
9.1.9.
The occurrence of (a) a Reportable Event as defined in ERISA which CNB
determines in good faith constitutes grounds for the institution of proceedings
to terminate any pension plan by the PBGC, (b) an appointment of a trustee to
administer any pension plan of Borrower, or (c) any other event or condition
which might constitute grounds under ERISA for the involuntary termination of
any pension plan of Borrower,
where such event set forth in (a), (b) or (c) results in a significant monetary
liability to Borrower;
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9.1.10.
Any obligee of Subordinated Debt fails to comply with the provisions of the
documents evidencing such Subordinated Debt or any Subordination
Agreement;
9.1.11.
Any Guarantor dies, becomes incapacitated, or revokes his or its Guaranty, or
such Guaranty becomes otherwise unenforceable with respect to future advances;
or
9.1.12.
The Termination Date is not extended.
9.2.
Notice of Default and
Cure of Events of Default. Except with respect to the Events of Default
specified in Subsections 9.1, 9.1.3, or 9.1.5 above, and subject to the
provisions of the Section 9.4 below, entitled "Additional Remedies", CNB will
give Borrower at least ten (10) days' written notice of any event which
constitutes or, with the lapse of time would become an Event of Default, during
which time Borrower will be entitled to cure same.
9.3.
CNB's
Remedies.
Upon the occurrence of an Event of Default, at the sole and exclusive
option of CNB, and upon written notice to Borrower, CNB may (a) declare the
principal of and accrued interest on the Loans, and all other Obligations
immediately due and payable in full, whereupon the same will immediately become
due and payable; (b) terminate this Agreement as to any future liability or
obligation of CNB, but without affecting CNB's rights and security interest in
the Collateral and without affecting the Obligations owing by Borrower to CNB;
and/or (c) exercise its rights and remedies under the Loan Documents and all
rights and remedies of a secured party under the Code and other applicable laws
with respect to all of the Collateral.
9.4.
Additional Remedies.
Notwithstanding any other provision of this Agreement, upon the
occurrence of any event, action or inaction by Borrower, or if any action or
inaction is threatened which CNB reasonably believes will materially affect the
value of the Collateral, CNB may take such legal actions as it deems necessary
to protect the Collateral, including but not limited to, seeking injunctive
relief and the appointment of a receiver, whether or not an Event of Default,
whether or not subject to cure, has occurred under this Agreement.
10.MISCELLANEOUS.
10.1.
Reimbursement of Costs
and Expenses.
Borrower will reimburse CNB for all reasonable costs and expenses
relating to this Agreement including, but not limited to, filing, recording or
search fees, audit or verification fees, appraisals of the Collateral and other
out-of-pocket expenses, and reasonable attorneys' fees and expenses expended or
incurred by CNB (or allocable to CNB's in-house counsel) in documenting or
administering the Loan Documents or collecting any sum which becomes due CNB
under the Loan Documents, irrespective of whether suit is filed, or in the
protection, perfection, preservation or enforcement of any and all rights of CNB
in connection with the Loan Documents, including, without limitation, the fees
and costs incurred in any outof-court work-out or a bankruptcy or
reorganization proceeding.
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10.2.
Dispute
Resolution.
10.2.1.
Mandatory Arbitration. At the request of CNB or Borrower, any dispute, claim or
controversy of any kind (whether in contract or tort, statutory or common law,
legal or equitable) now existing or hereafter arising between CNB and Borrower
and in any way arising out of, pertaining to or in connection with: (a) this
Agreement, and/or any renewals, extensions, or amendments thereto; (b) any of
the Loan Documents; (c) any violation of this Agreement or the Loan Documents;
(d) all past, present and future loans; (e) any incidents, omissions, acts,
practices or occurrences arising out of or related to this Agreement or the Loan
Documents causing injury to either party whereby the other party or its agents,
employees or representatives may be liable, in whole or in part, or (f) any
aspect of the past, present or future relationships of the parties, will be
resolved through final and binding arbitration conducted at a location
determined by the arbitrator in Los Angeles, California, and administered by the
American Arbitration Association ("AAA") in accordance with the California
Arbitration Act (Title 9, California
Code of Civil Procedure Section 1280 et. seq) and the then existing
Commercial Rules of the AAA. Judgment upon any award rendered by the
arbitrator(s) may be entered in any state or federal courts having jurisdiction
thereof.
10.2.2.
Real Property Collateral. Not withstanding the provisions of Section 10.2.1, no
controversy or claim will be submitted to arbitration without the consent of all
the parties if, at the time of the proposed submission, such controversy or
claim arises from or relates to an obligation owed to CNB which is secured in
whole or in part by real property collateral. If all parties do not consent to
submission of such a controversy or claim to arbitration, the controversy or
claim will be determined as provided in Subsection entitled judicial
reference.
10.2.3.
Judicial Reference. At the request of any party, a controversy or claim which is
not submitted to arbitration as provided and limited in Sections 10.2.1 and
10.2.2 will be determined by a reference in accordance with California
Code of Civil Procedure
Section 638 et. seq. If such an election is made, the parties will
designate to the court a referee or referees selected under the auspices of the
AAA in the same manner as arbitrators are selected in AAA-sponsored proceedings.
The presiding referee of the panel, or the referee if there is a single referee,
will be an active attorney or retired judge. Judgment upon the award rendered by
such referee or referees will be entered in the court in which such proceeding
was commenced in accordance with California
Code of
Civil Procedure Section 644 and Section 645.
10.2.4.
Provisional Remedies, Self Help and Foreclosure. No provision of this Agreement
will limit the right of any party to: (a) foreclose against any real property
collateral by the exercise of a power of sale under a deed of trust, mortgage or
other security agreement or instrument, or applicable law, (b) exercise any
rights or remedies as a secured party against any personal property collateral
pursuant to the terms of a security agreement or pledge agreement, or applicable
law, (c) exercise self help remedies such as setoff, or (d) obtain provisional
or ancillary remedies such as injunctive relief or the appointment of a receiver
from a court having jurisdiction before, during or after the pendency of any
arbitration or referral. The institution and maintenance of an action for
judicial relief or pursuit of provisional or ancillary remedies, or exercise of
self help remedies will not constitute a waiver of the right of any party,
including the plaintiff, to submit any dispute to arbitration or judicial
reference.
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10.2.5.
Powers and Qualifications of Arbitrators. The arbitrator(s) will give effect to
statutes of limitation, waiver and estoppel and other affirmative defenses in
determining any claim. Any controversy concerning whether an issue is
arbitratable will be determined by the arbitrator(s). The laws of the State of
California will govern. The arbitration award may include equitable and
declaratory relief. All arbitrator(s) selected will be required to be a
practicing attorney or retired judge licensed to practice law in the State of
California and will be required to be experienced and knowledgeable in the
substantive laws applicable to the subject matter of the controversy or claim at
issue.
10.2.6.
Discovery. The provisions of California Code of Civil Procedure
Section 1283.05 or its successor section(s) are incorporated herein and
made a part of this Agreement. Depositions may be taken and discovery may be
obtained in any arbitration under this Agreement in accordance with said
section(s).
10.2.7.
Miscellaneous. The arbitrator(s) will determine which is the prevailing party
and will include in the award that party's reasonable attorneys' fees and costs
(including allocated costs of in-house legal counsel). Each party agrees to keep
all controversies and claims and the arbitration proceedings strictly
confidential, except for disclosures of information required in the ordinary
course of business of the parties or by applicable law or
regulation.
10.3.
Cumulative Rights and
No Waiver.
All rights and remedies granted to CNB under the Loan Documents are
cumulative and no one such right or remedy is exclusive of any other. No failure
or delay on the part of CNB in exercising any power, right or remedy under any
Loan Document will operate as a waiver thereof, and no single or partial
exercise or waiver by CNB of any such power, right or remedy will preclude any
further exercise thereof or the exercise of any other power, right or
remedy.
10.4. Applicable
Law.
This Agreement will be governed by California law.
10.5.
Lien and Right of
Set-off. Borrower grants to CNB a continuing lien for all Obligations of
Borrower to CNB upon any and all moneys, securities and other property of
Borrower and the proceeds thereof, now or hereafter held or received by or in
transit to CNB from or for Borrower, whether for safekeeping, custody, pledge,
transmission, collection or otherwise, and also upon any and all deposits
(general or special) and credits of Borrower with, and any and all claims of
Borrower against, CNB at any time existing. Upon the occurrence of any Event of
Default, CNB is hereby authorized at any time and from time to time, without
notice to Borrower or any other Person to setoff, appropriate and apply any or
all items hereinabove referred to against all Obligations of Borrower whether
under this Agreement or otherwise, and whether now existing or hereafter
arising.
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| City National Bank |
CREDIT
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10.6.
Notices. Any
notice required or permitted under any Loan Document will be given in writing
and will be deemed to have been given when personally delivered or when sent by
the U.S. mail, postage prepaid, certified, return receipt requested, properly
addressed. For the purposes hereof, the addresses of the parties will, until
further notice given as herein provided, be as follows:
| CNB: | City National Bank | ||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
| Attn: ▇▇▇▇▇▇ ▇▇▇▇, Senior Vice President | |||
| Copies To: | City National Bank, Legal Department | ||
| ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ | |||
| Attn: Managing Counsel, Credit Unit | |||
| ▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman | |||
| PRI Medical Technologies, Inc. | |||
| ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇ | |||
| ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
| Borrower: | PRI Medical Technologies, Inc. | ||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
| Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CFO/Secretary |
10.7.
Assignments.
The provisions of this Agreement are hereby made applicable to and will
inure to the benefit of CNB's successors and assigns and Borrower's successors
and assigns; provided, however, that Borrower may not assign or transfer its
rights or obligations under this Agreement without the prior written consent of
CNB. CNB may assign this Agreement and its rights and duties hereunder. CNB
reserves the right to sell, assign, transfer, negotiate, or grant participations
in all or any part of, or any interest in CNB's rights and benefits hereunder.
In connection therewith, CNB may disclose all documents and information which
CNB now or hereafter may have relating to Borrower or Borrower's
business.
10.8.
Indemnification.
Borrower will, at all times, defend and indemnify and hold CNB (which for
purposes of this Section includes CNB's parent company and subsidiaries and all
of their respective shareholders, directors, officers, employees, agents,
representatives, successors, attorneys, and assigns) harmless from and against
any and all liabilities, claims, demands, causes of action, losses, damages,
expenses (including without limitation reasonable attorneys' fees, [which
attorneys may be employees of CNB, or may be outside counsel]) costs,
settlements, judgments or recoveries arising out of or resulting from (a) any
breach of the representations, warranties, agreements or covenants made by
Borrower herein; (b) any suit or proceeding of any kind or nature whatsoever
against CNB arising from or connected with the transactions contemplated by the
Loan Documents or any of the rights and properties assigned to CNB hereunder;
and/or (c) any suit or proceeding that CNB may deem necessary or advisable to
institute, in the name of CNB, Borrower or both, against any other Person, for
any reason whatsoever to protect the rights of CNB hereunder or under any of the
documents, instruments or agreements executed or to be executed pursuant
hereto, including attorneys' fees and court costs and all other costs and
expenses incurred by CNB (or allocable to CNB's in-house counsel), all of which
will be charged to and paid by Borrower and will be secured by the Collateral.
Any obligation or liability of Borrower to CNB under this Section will survive
the expiration or termination of this Agreement and the repayment of all Loans
and the payment or performance of all other Obligations of Borrower to
CNB.
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10.9.
Complete Aareement.
This Agreement, together with the other Loan Documents, constitutes the
entire agreement of the parties and supersedes any prior or contemporaneous oral
or written agreements or understandings, if any, which are merged into this
Agreement. The other Loan Documents are subject to the terms and conditions of
this Agreement, and, in the event of a conflict between the other Loan Documents
and this Agreement, the provisions of this Agreement shall control. This
Agreement may be amended only in a writing signed by Borrower and
CNB.
10.10.
Headings.
Section headings in this Agreement are included for convenience of
reference only and do not constitute a part of the Agreement for any
purpose.
10.11.
Accounting Terms.
Except as otherwise stated in this Agreement, all accounting terms and
financial covenants and information will be construed in conformity with, and
all financial data required to be submitted will be prepared in conformity with,
GAAP as in effect on the date hereof.
10.12.
Severability. Any provision of
the Loan Documents which is prohibited or unenforceable in any jurisdiction,
will be, only as to such jurisdiction, ineffective to the extent of such
prohibition or unenforceability, but all the remaining provisions of the Loan
Documents will remain valid.
10.13.
Counterparts.
This Agreement may be signed in any number of counterparts which, when
taken together, will constitute but one agreement.
10.14.
Joint and
Several.
Should more than one Person sign this Agreement, the obligations of each
signer will be joint and several.
This
Agreement is executed as of the date stated at the top of the first
page.
| "BORROWER" | |||
| PRI MEDICAL TECHNOLOGIES, INC., a Nevada corporation | |||
|
|
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
|
▇▇▇▇▇
▇.
▇▇▇▇▇
|
|||
| Chairman | |||
| "CNB" | |||
| City National Bank, a national banking association | |||
|
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | |
|
▇▇▇▇▇▇
▇▇▇▇
|
|||
| Senior Vice President | |||
18
| CITY NATONAL BANK | LOAN FEE AND CHARGES |
|
The
way up.
|
|
| Borrower: PRI Medical Technologies, Inc., | Date: June 5, 2008 |
| a Nevada corporation |
Branch
Name and No.: San ▇▇▇▇▇▇▇▇ Valley CBS # 048
| Customer No.: 716098 | Note No.: 00004 |
In
connection with the above referenced loan, fees and charges, as estimated, are
as follows:
| UCC Filing Fees | $53.00 | ||
| [ ] Quick Search | |||
| [X] UCC-I | |||
| [ ] UCC-3 | |||
| [ ] UCC-II | |||
| [ ] Certificate of Status/Articles | |||
| Total Estimated Fees | $53.00 |
Actual
fees may be higher or lower than estimated fees. Any excess funds will be
deposited to Borrower's Checking Account or reimbursed by Cashier's Check. If
fees collected are insufficient to cover out of pocket costs, the Borrower will
be billed directly for the balance unless authorization to debit the account is
received.
PRI Medical
Technologies, Inc.,
a Nevada
corporation
|
By:
/s ▇▇▇▇▇ ▇. ▇▇▇▇▇
|
|
| ▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman |
To: City
National Bank
I hereby
authorize you to charge the aforementioned fees and charges to depository
account number_______________________.
|
Date
|
Borrower
|
19
COMMERCIAL
GUARANTY
| Principal | Loan Date | Matutity | Loan No | Call / Coll | Account | Officer GH | Initials |
| References in the boxes above are
for Lender's use only and do not limit the applicability of this document
to any particular loan or
item.
Any
item above containing "*"" has been omitted due to text length
limitations.
|
|||||||
| Borrower: | PRI MEDICAL TECHNOLOGIES, INC., A NEVADA | Lender: | City National Bank, a national banking association |
| CORPORATION | San ▇▇▇▇▇▇▇▇ Valley Commercial Banking Services | ||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | #▇▇▇▇▇▇ | ||
| ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
| Guarantor: | EMERGENT GROUP, INC., A NEVADA | ||
| CORPORATION | |||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
CONTINUING GUARANTEE OF PAYMENT AND PERFORMANCE. For good and
valuable consideration, Guarantor absolutely and unconditionally guarantees full
and punctual payment and satisfaction of Guarantor's Share of the Indebtedness
of Borrower to Lender, and the performance and discharge of all Borrower's
obligations under the Note and the Related Documents. This is a guaranty of
payment and performance and not of collection, so Lender can enforce this
Guaranty against Guarantor even when Lender has not exhausted Lender's remedies
against anyone else obligated to pay the Indebtedness or against any collateral
securing the Indebtedness, this Guaranty or any other guaranty of the
Indebtedness. Guarantor will make any payments to Lender or its order, on
demand, in legal tender of the United States of America, in, same-day funds,
without set-off or deduction or counterclaim, and will otherwise perform
Borrower's obligations under the Note and Related Documents. Under this
Guaranty, Guarantor's obligations are continuing.
INDEBTEDNESS. The word "Indebtedness" as used
in this Guaranty means all of the principal amount outstanding from time to time
and at any one or more times, accrued unpaid interest thereon and all collection
costs and legal expenses related thereto permitted by law, attorneys' fees,
arising from any and all debts, liabilities and obligations of every nature or
form, now existing or hereafter arising or acquired, that Borrower individually
or collectively or interchangeably with others, owes or will owe Lender.
"Indebtedness" includes, without limitation, loans, advances, debts, overdraft
indebtedness, credit card indebtedness, lease obligations, liabilities and
obligations under any interest rate protection agreements or foreign currency
exchange agreements or commodity price protection agreements, other obligations,
and liabilities of Borrower, and any present or future judgments against
Borrower, future advances, loans or transactions that renew, extend, modify,
refinance, consolidate or substitute these debts, liabilities and obligations
whether: voluntarily or involuntarily incurred; due or to become due by their
terms or acceleration; absolute or contingent; liquidated or unliquidated;
determined or undetermined; direct or indirect; primary or secondary in nature
or arising from a guaranty or surety; secured or unsecured; joint or several or
joint and several; evidenced by a negotiable or non-negotiable instrument or
writing; originated by Lender or another or others; barred or unenforceable
against Borrower for any reason whatsoever; for any transactions that may be
voidable for any reason (such as infancy, insanity, ultra ▇▇▇▇▇ or otherwise);
and originated then reduced or extinguished and then afterwards increased or
reinstated.
If Lender
presently holds one or more guaranties, or hereafter receives additional
guaranties from Guarantor, Lender's rights under all guaranties shall be
cumulative. This Guaranty shall not (unless specifically provided below to the
contrary) affect or invalidate any such other guaranties. Guarantor's liability
will be Guarantor's aggregate liability under the terms of this Guaranty and any
such other unterminated guaranties.
GUARANTOR'S SHARE OF THE INDEBTEDNESS. The words
"Guarantor's Share of the Indebtedness" as used in this Guaranty mean 100.000%
of the principal amount, plus interest thereon to the extent not prohibited by
law, and all collection costs, expenses and attorneys' fees whether or not there
is a lawsuit, and if there is a lawsuit, any fees and costs for trial and
appeals, not to exceed One Million Five Hundred Thousand & 00/100 Dollars
($1,500,000.00).
Lender
shall determine Guarantor's Share of the Indebtedness when Lender makes demand
on Guarantor. After a determination, Guarantor's Share of the Indebtedness will
only be reduced by sums actually paid by Guarantor under this Guaranty, but will
not be reduced by sums from any other source including, but not limited to, sums
realized from any collateral securing the Indebtedness or this Guaranty, or
payments by anyone other than Guarantor, or reductions by operation of law,
judicial order or equitable principles. Lender has the sole and absolute
discretion to determine how sums shall be applied among guaranties of the
Indebtedness.
The above
limitation on liability is not a restriction on the amount of the Note of
Borrower to Lender either in the aggregate or at any one time.
CONTINUING GUARANTY. THIS IS A
"CONTINUING GUARANTY" UNDER WHICH GUARANTOR AGREES TO GUARANTEE THE FULL AND
PUNCTUAL PAYMENT, PERFORMANCE AND SATISFACTION OF THE GUARANTOR'S SHARE OF THE
INDEBTEDNESS OF BORROWER TO LENDER, NOW EXISTING OR HEREAFTER ARISING OR
ACQUIRED, ON A CONTINUING BASIS. ACCORDINGLY, ANY PAYMENTS MADE ON THE
INDEBTEDNESS WILL NOT DISCHARGE OR DIMINISH GUARANTOR'S OBLIGATIONS AND
LIABILITY UNDER THIS GUARANTY FOR ANY REMAINING AND SUCCEEDING INDEBTEDNESS EVEN
WHEN ALL OR PART OF THE OUTSTANDING INDEBTEDNESS MAY BE A ZERO BALANCE FROM TIME
TO TIME.
DURATION OF GUARANTY. This Guaranty will
take effect when received by Lender without the necessity of any acceptance by
Lender, or any notice to Guarantor or to Borrower, and will continue in full
force until all the Indebtedness incurred or contracted before receipt by Lender
of any notice of revocation shall have been fully and finally paid and satisfied
and all of Guarantor's other obligations under this Guaranty shall have been
performed in full. If Guarantor elects to revoke this Guaranty, Guarantor may
only do so in writing. Guarantor's written notice of revocation must be mailed
to Lender, by certified mail, at Lender's address listed above or such other
place as Lender may designate in writing. Written revocation of this Guaranty
will apply only to new Indebtedness created after actual receipt by Lender of
Guarantor's written revocation. For this purpose and without limitation, the
term "new Indebtedness" does not include the Indebtedness which at the time of
notice of revocation is contingent, unliquidated, undetermined or not due and
which later becomes absolute, liquidated, determined or due. For this purpose
and without limitation, "new Indebtedness" does not include all or part of the
Indebtedness that is: incurred by Borrower prior to revocation; incurred under a
commitment that became binding before revocation; any renewals, extensions,
substitutions, and modifications of the Indebtedness. This Guaranty shall bind
Guarantor's estate as to the Indebtedness created both before and after
Guarantor's death or incapacity, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect.
20
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COMMERCIAL
GUARANTY
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| Loan No. 00004 |
(Continued)
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Page
2
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Release
of any other guarantor or termination of any other guaranty of the Indebtedness
shall not affect the liability of Guarantor under this Guaranty. A revocation
Lender receives from any one or more Guarantors shall not affect the liability
of any remaining Guarantors under this Guaranty. It is anticipated that
fluctuations may occur in the aggregate amount of the Indebtedness covered by
this Guaranty, and Guarantor specifically acknowledges and agrees that
reductions in the amount of the Indebtedness, even to zero dollars 1$0.001,
shall not constitute a termination of this Guaranty. This Guaranty is binding
upon Guarantor and Guarantor's heirs, successors and assigns so long as any of
the Guarantor's Share of the Indebtedness remains unpaid and
even though
the Guarantor's Share of the Indebtedness may from
time to time
be zero dollars (S0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor
authorizes Lender, either before or after any revocation hereof, without notice
or demand and without lessening Guarantor's liability under this Guaranty, from
time to time: (A) prior to revocation as set forth above, to make one or more
additional secured or unsecured loans to Borrower, to lease equipment or other
goods to Borrower, or otherwise to extend additional credit to Borrower; (B) to
alter, compromise, renew, extend, accelerate, or otherwise change one or more
times the time for payment or other terms of the Indebtedness or any part of the
Indebtedness, including increases and decreases of the rate of interest on the
Indebtedness; extensions may be repeated and may be for longer than the original
loan term; (C) to take and hold security for the payment of this Guaranty or the
Indebtedness, and exchange, enforce, waive, subordinate, fail or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (D) to release, substitute, agree not to ▇▇▇, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (E) to determine how, when and what application
of payments and credits shall be made on the Indebtedness; (F) to apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(GI to sell, transfer, assign or grant participations in all or any part of the
Indebtedness; and (H) to assign or transfer this Guaranty in whole or in
part.
GUARANTOR'S REPRESENTATIONS AND
WARRANTIES. Guarantor represents and warrants to Lender that (A) no
representations or agreements of any kind have been made to Guarantor which
would limit or qualify in any way the terms of this Guaranty; (B) this Guaranty
is executed at Borrower's request and not at the request of Lender; (C)
Guarantor has full power, right and authority to enter into this Guaranty; (D)
the provisions of this Guaranty do not conflict with or result in a default
under any agreement or other instrument binding upon Guarantor and do not result
in a violation of any law, regulation, court decree or order applicable to
Guarantor; (E) Guarantor has not and will not, without the prior written consent
of Lender, sell, lease, assign, encumber, hypothecate, transfer, or otherwise
dispose of all or substantially all of Guarantor's assets, or any interest
therein; (F) upon Lender's request, Guarantor will provide to Lender financial
and credit information in form acceptable to Lender, and all such financial
information which currently has been, and all future financial information which
will be provided to Lender is and will be true and correct in all material
respects and fairly present Guarantor's financial condition as of the dates the
financial information is provided; (G) no material adverse change has occurred
in Guarantor's financial condition since the date of the most recent financial
statements provided to Lender and no event has occurred which may materially
adversely affect Guarantor's financial condition; (H) no litigation, claim,
investigation, administrative proceeding or similar action (including those for
unpaid taxes) against Guarantor is pending or threatened; (I) Lender has made no
representation to Guarantor as to the creditworthiness of Borrower; and (J)
Guarantor has established adequate means of obtaining from Borrower on a
continuing basis information regarding Borrower's financial condition. Guarantor
agrees to keep adequately informed from such means of any facts, events, or
circumstances which might in any way affect Guarantor's risks under this
Guaranty, and Guarantor further agrees that, absent a request for information,
Lender shall have no obligation to disclose to Guarantor any information or
documents acquired by Lender in the course of its relationship with
Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by
applicable law, Guarantor waives any right to require Lender to (A) make any
presentment, protest, demand, or notice of any kind, including notice of change
of any terms of repayment of the Indebtedness, default by Borrower or any other
guarantor or surety, any action or nonaction taken by Borrower, Lender, or any
other guarantor or surety of Borrower, or the creation of new or additional
Indebtedness; (B) proceed against any person, including Borrower, before
proceeding against Guarantor; (C) proceed against any collateral for the
Indebtedness, including Borrower's collateral, before proceeding against
Guarantor; (D) apply any payments or proceeds received against the Indebtedness
in any order; (El give notice of the terms, time, and place of any sale of the
collateral pursuant to the Uniform Commercial Code or any other law governing
such sale; (F) disclose any information about the Indebtedness, the Borrower,
the collateral, or any other guarantor or surety, or about any action or
nonaction of Lender; or (G) pursue any remedy or course of action in Lender's
power whatsoever.
Guarantor
also waives any and all rights or defenses arising by reason of (HI any
disability or other defense of Borrower, any other guarantor or surety or any
other
person; (I) the cessation from any cause whatsoever, other than payment
in full, of the Indebtedness; (J) the application of proceeds of the
Indebtedness by Borrower for purposes other than the purposes understood and
intended oy Guarantor and Lender; (K) any act of omission or commission by
Lender which directly or indirectly results in or contributes to the discharge
of Borrower or any other guarantor or surety, or the Indebtedness, or the loss
or release of any collateral by operation of law or otherwise; (L) any statute
of limitations in any action under this Guaranty or on the Indebtedness; or (M)
any modification or change in terms of the Indebtedness, whatsoever, including
without limitation, the renewal, extension, acceleration, or other change in the
time payment of the Indebtedness is due and any change in the interest rate, and
including any such modification or change in terms after revocation of this
Guaranty on the Indebtedness incurred prior to such revocation.
Guarantor
waives all rights of subrogation, reimbursement, indemnification, and
contribution and any other rights and defenses that are or may become
available to Guarantor by reason of California Civil Code Sections 2787 to 2855,
inclusive,
Guarantor
waives all rights and any defenses arising out of an election of remedies by
Lender even though that the election of remedies, such as a non-judicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
Guarantor's rights of subrogation and reimbursement against Borrower by
operation of Section 580d of the California Code of Civil Procedure or
otherwise.
Guarantor
waives all rights and defenses that Guarantor may have because Borrower's
obligation is secured by real property. This means among other things: (N)
Lender may collect from Guarantor without first foreclosing on any real or
personal property collateral pledged by Borrower. (0) If Lender forecloses on
any real property collateral pledged by Borrower: (1) the amount of Borrower's
obligation may be reduced only by the price for which the collateral is sold at
the foreclosure sale, even if the collateral is worth more than the sale price.
(21 Lender may collect from Guarantor even if Lender, by foreclosing on the real
property collateral, has destroyed any right Guarantor may have to collect from
Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses Guarantor may have because Borrower's obligation is secured by
real property. These rights and defenses include, but are not limited to,
any rights and defenses based upon Section 580a, 580b, 580d, or 726 of the Code
of Civil Procedure.
Guarantor
understands and agrees that the foregoing waivers are unconditional and
irrevocable waivers of substantive rights and defenses to which Guarantor might
otherwise be entitled under state and federal law. The rights and defenses
waived include, without limitation, those provided by California laws of
suretyship and guaranty, anti-deficiency laws, and the Uniform Commercial Code.
Guarantor acknowledges that Guarantor has provided these waivers of rights and
defenses with the intention that they be fully relied upon by Lender. Guarantor
further understands and agrees that this Guaranty is a separate and independent
contract between Guarantor and Lender, given for full and ample consideration,
and is enforceable on its own terms. Until all of the Indebtedness is paid in
full, Guarantor waives any right to enforce any remedy
Guarantor may have against the Borrower or any other guarantor, surety, or other
person, and further, Guarantor waives any right to participate in any collateral
for the Indebtedness now or hereafter held by Lender.
21
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COMMERCIAL
GUARANTY
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| Loan No. 00004 |
(Continued)
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Page
3
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Guarantor's Understanding With Respect To Waivers.
Guarantor warrants and agrees that each of the waivers set forth above is made
with Guarantor's full knowledge of its significance and consequences and that,
under the circumstances, the waivers are reasonable and not contrary to public
policy or law. If any such waiver is determined to be contrary to any applicable
law or public policy, such waiver shall be effective only to the extent
permitted by law or public policy.
Subordination of Borrower's Debts to Guarantor.
Guarantor agrees that the Indebtedness, whether now existing or hereafter
created, shall be superior to any claim that Guarantor may now have or hereafter
acquire against Borrower, whether or not Borrower becomes insolvent. Guarantor
hereby expressly subordinates any claim Guarantor may have against Borrower,
upon any account whatsoever, to any claim that Lender may now or hereafter have
against Borrower. In the event of insolvency and consequent liquidation of the
assets of Borrower, through bankruptcy, by an assignment for the benefit of
creditors, by voluntary liquidation, or otherwise, the assets of Borrower
applicable to the payment of the claims of both Lender and Guarantor shall be
paid to Lender and shall be first applied by Lender to the Indebtedness.
Guarantor does hereby assign to Lender all claims which it may have or acquire
against Borrower or against any assignee or trustee in bankruptcy of Burrower;
provided however, that such assignment
shall be effective only fur the purpose of assuring to
Lender full
payment
in legal
tender of the Indebtedness. If Lender so requests, any notes or credit
agreements now or hereafter evidencing any debts or obligations of Borrower to
Guarantor shall be marked with a legend that the same are subject to this
Guaranty and shall be delivered to Lender. Guarantor agrees, and Lender is
hereby authorized, in the name of Guarantor, from time to time to file financing
statements and continuation statements and to execute documents and to take such
other actions as Lender deems necessary or appropriate to perfect, preserve and
enforce its
rights under this
Guaranty.
Miscellaneous Provisions. The following
miscellaneous provisions are a part of this Guaranty:
AMENDMENTS. This Guaranty,
together with any Related Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth in this Guaranty. No
alteration of or amendment to this Guaranty shall be effective unless given in
writing and signed by
the party or parties sought to be charged or bound by the alteration or
amendment.
ATTORNEYS' FEES; EXPENSES.
Guarantor agrees to pay upon demand all of Lender's costs and expenses,
including Lender's attorneys' fees and Lender's legal expenses, incurred in
connection with the enforcement of this Guaranty. Lender may hire or pay someone
else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses
of such enforcement. Costs and expenses include Lender's attorneys' fees and
legal expenses whether or not there is a lawsuit, including attorneys' fees and
legal expenses for bankruptcy proceedings (including efforts to modify or vacate
any automatic stay or injunction}, appeals, and any anticipated post-judgment
collection services. Guarantor also shall pay all court costs and such
additional fees as may be directed by the court.
CAPTION HEADINGS. Caption
headings in this Guaranty are for convenience purposes only and are not to be
used to interpret or define the provisions of this Guaranty.
GOVERNING LAW. This Guaranty
will be governed by federal law applicable to Lender and, to the extent not
preempted by federal law, the laws of the State of California without regard to
its conflicts of law provisions.
CHOICE OF VENUE. If there is a
lawsuit, Guarantor agrees upon Lender's request to submit to the jurisdiction of
the courts of LOS ANGELES County, State of California.
INTEGRATION. Guarantor further
agrees that Guarantor has read and fully understands the terms of this Guaranty;
Guarantor has had
the opportunity to
be advised by
Guarantor's attorney with respect to
this Guaranty; the Guaranty fully reflects Guarantor's intentions and parol
evidence is not required to interpret the terms of this Guaranty. Guarantor
hereby indemnifies and holds Lender harmless from all losses, claims, damages,
and costs (including Lender's attorneys' fees) suffered or incurred by Lender as
a result of any breach by Guarantor of the warranties, representations and
agreements of this paragraph.
INTERPRETATION. In all cases
where there is more than one Borrower or Guarantor, then all words used in this
Guaranty in the singular shall be deemed to have been used
in the plural where the context and construction so require; and where there is
more than one Borrower named in this Guaranty or when this Guaranty is executed
by more than one Guarantor, the words "Borrower" and "Guarantor" respectively
shall mean all and any one or more of them. The words "Guarantor," "Borrower,"
and "Lender" include the heirs, successors, assigns, and transferees of each of
them. If a court finds that any provision of this Guaranty is not valid or
should not be enforced, that fact by itself will not mean that the rest of this
Guaranty will not be valid or enforced. Therefore, a court will enforce the rest
of the provisions of this Guaranty even if a provision of this Guaranty may be
found to be invalid or unenforceable. If any one or more of Borrower or
Guarantor are corporations, partnerships, limited liability companies, or
similar entities, it is not necessary for Lender to inquire into the powers of
Borrower or Guarantor or of the officers, directors, partners, managers, or
other agents acting or purporting to act on their behalf, and any
indebtedness made or created in reliance upon the professed exercise of
such powers shall be guaranteed under this Guaranty.
NOTICES. Any notice required to be given under
this Guaranty shall be given in writing, and, except for revocation notices by
Guarantor, shall be effective when actually delivered, when actually received by
telefacsimile (unless otherwise required by law), when deposited with a
nationally recognized overnight courier, or, if mailed, when deposited in the
United States mail, as first class, certified or registered mail postage
prepaid, directed to the addresses shown near the beginning of this Guaranty.
All revocation notices by Guarantor shall be in writing and shall be effective
upon delivery to Lender as provided in the section of this Guaranty entitled
"DURATION OF GUARANTY." Any party may change its address for notices under this
Guaranty by giving formal written notice to the other parties, specifying that
the purpose of the notice is to change the party's address. For notice purposes,
Guarantor agrees to keep Lender informed at all times of Guarantor's current
address. Unless otherwise provided or required by law, if there is more than one
Guarantor, any notice given by Lender to any Guarantor is deemed to be notice
given to all Guarantors.
NO WAIVER BY LENDER. Lender
shall not be deemed to have waived any rights under this Guaranty unless such
waiver is given in writing and signed by Lender. No delay or omission on the
part of
Lender in exercising any right shall operate as a waiver of such right or
any other right. A
waiver by Lender of a provision of this Guaranty shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict compliance with
that provision or any other provision of this Guaranty. No prior waiver by
Lender, nor any course of dealing between Lender and Guarantor, shall constitute
a waiver of any of Lender's rights or of any of Guarantor's obligations as to
any future transactions. Whenever the consent of Lender is required under this
Guaranty, the granting of such consent by Lender in any instance shall not
constitute continuing consent to subsequent instances where such consent
is required and in all cases such consent may be granted or withheld in the sole
discretion of Lender.
SUCCESSORS AND ASSIGNS. Subject to
any limitations stated in this Guaranty on transfer of Guarantor's interest,
this Guaranty shall be binding upon and inure to the benefit of the parties,
their successors and assigns.
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COMMERCIAL
GUARANTY
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| Loan No. 00004 |
(Continued)
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Page
4
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Definitions. The following capitalized words
and terms shall have the following meanings when used in this Guaranty. Unless
specifically stated to the contrary, all
references to dollar amounts shall mean amounts in lawful money of the
United States of America. Words and terms used in the
singular shall include the plural, and the plural shall include the singular, as
the context may require. Words and terms not otherwise defined in this Guaranty
shall have the meanings attributed to such terms in the Uniform Commercial
Code:
BORROWER. The word "Borrower"
means PRI MEDICAL TECHNOLOGIES, INC., A NEVADA CORPORATION and includes all
co-signers and co-makers signing the Note and all their successors and
assigns.
GUARANTOR. The word
"Guarantor" means everyone
signing this Guaranty, including without limitation EMERGENT GROUP, INC.,
A NEVADA CORPORATION, and in each case, any signer's successors and
assigns.
GUARANTOR'S SHARE OF THE
INDEBTEDNESS. The words "Guarantor's Share of the Indebtedness" mean
Guarantor's indebtedness to Lender as more particularly described in this
Guaranty.
GUARANTY. The word "Guaranty"
means this guaranty from Guarantor to Lender.
INDEBTEDNESS. The word
"Indebtedness" means Borrower's indebtedness to Lender as more particularly
described in this Guaranty. LENDER. The word "Lender"
means City National Bank, a national banking association, its successors and
assigns.
NOTE. The word "Note" means
the promissory note dated June 5, 2008, in the
original principal amount of $1,000,000.00 from Borrower to Lender,
together with all renewals of, extensions of, modifications of, refinancings of,
consolidations of, and substitutions for the promissory note or
agreement.
RELATED
DOCUMENTS. The words "Related Documents" mean all promissory notes, credit
agreements, loan agreements, environmental agreements, guaranties, security
agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and
all other instruments, agreements and documents, whether now or hereafter
existing, executed in connection with the Indebtedness.
EACH UNDERSIGNED GUARANTOR
ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS GUARANTY AND AGREES
TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT THIS GUARANTY IS
EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS GUARANTY TO LENDER AND
THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE MANNER SET FORTH IN THE
SECTION TITLED "DURATION OF GUARANTY". NO FORMAL ACCEPTANCE BY LENDER IS
NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY IS DATED JUNE 5,
2008.
GUARANTOR:
EMERGENT
GROUP, INC., A NEVADA
CORPORATION
By: /s/
▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇,
Chairman of EMERGENT GROUP,
INC.,
A NEVADA CORPORATION
23
CORPORATE
RESOLUTION TO BORROW / GRANT COLLATERAL
|
Principal
$1,000,000.00
|
Loan
Date
06-05-2008
|
Maturity
06-03-2008
|
Loan
No
00004
|
Call /
Coll
|
Account
716098
|
Officer
GH
|
Initials
|
|
References
in the boxes
above are for Lender's use only and do not limit
the applicability
of
this document to any particular loan or item.
Any
item above containing n" "*"
has been omitted due to text length
limitations
|
|||||||
| Corporation: | PRI MEDICAL TECHNOLOGIES, INC., A NEVADA | Lender: | City National Bank, a national banking association |
| CORPORATION | San ▇▇▇▇▇▇▇▇ Valley Commercial Banking Services | ||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | #▇▇▇▇▇▇ | ||
| ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
I,
THE UNDERSIGNED, DO HEREBY CERTIFY THAT:
THE CORPORATION'S EXISTENCE.
The complete and correct name of the Corporation is PRI MEDICAL
TECHNOLOGIES, INC., A NEVADA CORPORATION ("Corporation"). The Corporation is a
corporation for profit which is, and at all times shall be, duly organized,
validly existing, and in good standing under and by virtue of the laws of the
State of Nevada. The Corporation is duly authorized to transact business in the
State of California and all other states in which the Corporation is doing
business, having obtained all necessary filings, governmental licenses and
approvals for each
state in which
the Corporation is doing business. Specifically, the Corporation is, and
at all times shall be, duly qualified as a foreign corporation in all states in
which the failure to so qualify would have a material adverse effect on its
business or financial condition. The Corporation has the full power and
authority to own its properties and to transact the business in which it is
presently engaged or presently proposes to engage. The Corporation maintains its
principal office at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Unless the
Corporation has designated otherwise in writing, this is the principal office at
which the Corporation keeps its books
and records. The Corporation will notify Lender prior to any change in
the location of the Corporation's state of organization or any change in the
Corporation's name. The Corporation shall do all things necessary to preserve
and to keep in full force and effect its existence, rights and privileges, and
shall comply with all regulations, rules, ordinances, statutes, orders and
decrees of any governmental or quasi-governmental authority or court applicable
to the Corporation and the Corporation's business activities.
RESOLUTIONS ADOPTED.
At a meeting of the Directors of the Corporation, or if the Corporation
is a close corporation having no Board of Directors then at a meeting of the
Corporation's shareholders, duly called and held on May 1, 2008, at which a
quorum was present and voting, or by other duly authorized action in lieu of a
meeting, the resolutions set forth in this Resolution were adopted.
OFFICERS. The following named persons are
officers of PRI MEDICAL TECHNOLOGIES, INC., A NEVADA CORPORATION:
| NAMES | TITLES | AUTHORIZED | ACTUAL SIGNATURES |
| ▇▇▇▇▇ ▇. ▇▇▇▇▇ | Chairman | Y | X /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ |
| ▇▇▇▇▇▇▇ ▇▇▇▇▇ | CFO/Secretary | Y | X /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ |
ACTIONS
AUTHORIZED. Any one (1)
of the authorized persons listed above may enter into any agreements of
any nature with Lender, and those agreements will bind the Corporation.
Specifically, but without limitation, any one (1) of such authorized persons are
authorized, empowered,
and directed to do the following for and on behalf of the
Corporation:
Borrow
Money. To borrow, as a cosigner or otherwise, from time to time from Lender, on
such terms as may be agreed upon between the Corporation and Lender, such sum or
sums of money as in their judgment should be borrowed, without
limitation.
Execute
Notes. To execute and deliver to Lender the promissory note or notes, or other
evidence of the Corporation's credit accommodations, on Lender's forms, at such
rates of interest and on such terms as may be agreed upon, evidencing the sums
of money so borrowed or any of the Corporation's indebtedness to Lender, and
also to execute and deliver to Lender one or more renewals, extensions, modifications,
refinancings, consolidations, or substitutions for one or more of the notes, any
portion of the notes, or any other evidence of credit
accommodations.
Grant
Security. To mortgage, pledge, transfer, endorse, hypothecate, or otherwise
encumber and deliver to Lender any property now or hereafter belonging to the
Corporation or in which the Corporation now or hereafter may have an interest,
including without limitation all of the Corporation's real property and all of
the Corporation's personal property (tangible or intangible), as security for
the payment of any loans or credit accommodations so obtained, any promissory
notes so executed (including any amendments to or modifications, renewals, and
extensions of such promissory notes), or any other or further indebtedness of
the Corporation to Lender at any time owing, however the same may be evidenced.
Such property may be mortgaged, pledged, transferred, endorsed, hypothecated or
encumbered at the time such loans are obtained or such indebtedness is incurred,
or at any other time or times, and may be either in addition to or in lieu of
any property theretofore mortgaged, pledged, transferred, endorsed, hypothecated
or encumbered.
Execute
Security Documents. To execute and deliver to Lender the forms of mortgage, deed
of trust, pledge agreement, hypothecation agreement, and other
security agreements and financing statements which Lender may require and which
shall evidence the terms and conditions under and pursuant to which such liens
and encumbrances, or any of them, are given; and also to execute and deliver to
Lender any other written instruments, any chattel paper, or any other
collateral, of any kind or nature, which Lender may deem necessary or proper in
connection with or pertaining to the giving of the liens and encumbrances.
Notwithstanding the foregoing, any one of the above authorized persons may
execute, deliver, or record financing statements.
Negotiate
Items. To draw, endorse, and discount with Lender all drafts, trade
acceptances, promissory notes, or other evidences of indebtedness payable to or
belonging to the Corporation or in which the Corporation may have an interest,
and either to receive cash for the same or to cause such proceeds to be credited
to the Corporation's account with Lender, or to cause such other disposition of
the proceeds derived therefrom as they may deem advisable.
Further Acts. In the case of lines of credit,
to designate additional or alternate individuals as being
authorized to request advances under such lines, and in all cases, to do
and perform such other acts and things, to pay any and all fees and costs, and
to execute and deliver such other documents and agreements as the officers may
in their discretion deem reasonably necessary or proper in order to carry into
effect the provisions of this Resolution. The following person or persons are
authorized to request advances and authorize payments under the line of credit
until Lender receives from the Corporation, at Lender's address shown above,
written notice of revocation of such authority: ▇▇▇▇▇
▇. ▇▇▇▇▇, Chairman of PRI MEDICAL TECHNOLOGIES, INC., A NEVADA
CORPORATION; and ▇▇▇▇▇▇▇ ▇▇▇▇▇, CFO/Secretary of PRI MEDICAL TECHNOLOGIES, INC.,
A NEVADA CORPORATION.
24
|
CORPORATE RESOLUTION TO BORROW / GRANT
COLLATERAL
|
||
|
(Continued)
|
||
| Loan No: 00004 |
Page
|
|
ASSUMED
BUSINESS NAMES. The
Corporation has filed or recorded all documents or filings required by
Law relating to all assumed business names used by the Corporation. Excluding
the name of the Corporation, the
following is a complete list of all assumed business names under which the
Corporation does business: None.
NOTICES
TO LENDER. The Corporation will promptly notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (A} change in the Corporation's name; (13)
change in the Corporation's assumed business name(s); (C) change in the
management of the Corporation; (0) change in the authorized signer(s); (E)
change in the Corporation's principal office address; (F) change in the
Corporation's state of organization; (G) conversion of the Corporation to a new
or different type of business entity; or (H) change in any other
aspect of the Corporation that directly or indirectly relates to any agreements
between the Corporation and Lender. No change in the Corporation's name or state
of organization will take effect until after Lender has received
notice.
CERTIFICATION
CONCERNING OFFICERS AND RESOLUTIONS. The officers named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set opposite their respective names. This Resolution
now stands of record on the books of the Corporation, is in full force and
effect, and has not been modified or revoked in any manner
whatsoever.
NO
CORPORATE SEAL. The Corporation has no corporate seal, and therefore, no
seal is affixed to this Resolution.
CONTINUING
VALIDITY. Any and all acts authorized pursuant to this Resolution and
performed prior to the passage of this Resolution are hereby ratified and
approved. This Resolution shall be continuing, shall remain in full force and
effect and Lender may rely on it until written notice of its revocation shall
have been delivered to and received by Lender at Lender's address shown above
(or such addresses as Lender may designate from time to time). Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.
IN
TESTIMONY WHEREOF, I
have hereunto set my hand and attest that the signatures set opposite the
names listed above are their genuine signatures.
I have read all the provisions of this
Resolution, and I personally and on behalf of the Corporation
certify that all statements and representations made in this Resolution
are
true and correct. This
Corporate Resolution to Borrow / Grant Collateral is dated June 5,
2008.
| CERTIFIED TO AND ATTESTED BY: | |||
|
|
X
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇▇▇▇▇, CFO/Secretary of PRI MEDICAL | |||
| TECHNOLOGIES, INC., A NEVADA CORPORATION | |||
NOTE: if
the officers signing this Resolution are designated by the foregoing document as
one of the officers authorized to act on the Corporation's behalf, it is
advisable to have this Resolution signed by at least one non-authorized officer
of the Corporation.
25
CORPORATE
RESOLUTION TO GRANT COLLATERAL/ GUARANTEE
|
Principal
$1,000,000.00
|
Loan
Date
06-05-2008
|
Maturity
06-03-2008
|
Loan
No
00004
|
Call /
Coll
|
Account
716098
|
Officer
GH
|
Initials
|
|
References
in the boxes
above are for Lender's use only and do not limit
the applicability
of
this document to any particular loan or item.
Any
item above containing n" "*"
has been omitted due to text length
limitations
|
|||||||
| Borrower: | PRI MEDICAL TECHNOLOGIES, INC., A NEVADA | Lender: | City National Bank, a national banking association |
| CORPORATION | San ▇▇▇▇▇▇▇▇ Valley Commercial Banking Services | ||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | #▇▇▇▇▇▇ | ||
| ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ | |||
| Corporation: | EMERGENT GROUP, INC., A NEVADA | ||
| CORPORATION | |||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||
| ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ |
I, THE
UNDERSIGNED, DO HEREBY CERTIFY THAT:
THE
CORPORATION'S EXISTENCE. The complete and correct name of the Corporation is
EMERGENT GROUP, INC., A NEVADA CORPORATION ("Corporation"). The Corporation is a
corporation for profit which is,
and at all times shall be, duly organized, validly existing, and in good
standing under and by virtue of the laws of the State of Nevada. The Corporation
is duly authorized to transact business in the State of California and all other
states in which the Corporation is doing business, having obtained all necessary
filings, governmental licenses and approvals for each state in which the
Corporation is doing business. Specifically, the Corporation is,
and at all times shall be, duly qualified as a foreign corporation in all
states in which the failure to so qualify would have a material adverse effect
on its business or financial condition. The Corporation has the full power and
authority to own its properties and to transact the business in which it is
presently engaged or presently proposes to engage. The Corporation maintains its
principal office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Unless the
Corporation has designated otherwise in writing, this is the principal office at
which the Corporation keeps its books and records. The Corporation will notify
Lender prior to any change in the location of the Corporation's state of
organization or any change in the Corporation's name. The Corporation shall do
all things necessary to preserve and to keep in full force and effect its
existence, rights and privileges, and shall comply
with all regulations, rules, ordinances, statutes, orders and decrees of
any governmental or quasi-governmental authority or court applicable
to the Corporation and the Corporation's business activities.
RESOLUTIONS ADOPTED. At a meeting of the
Directors of the Corporation, or if the Corporation is a close corporation
having no Board of Directors then at a meeting of the Corporation's
shareholders, duly called and held on May 1, 2008, at which a quorum was
present and voting, or by other duly authorized action in lieu of a meeting, the
resolutions set forth in this Resolution were adopted.
OFFICERS. The following named persons are
officers of EMERGENT
GROUP, INC., A NEVADA CORPORATION:
| NAMES | TITLES | AUTHORIZED | ACTUAL SIGNATURES |
| ▇▇▇▇▇ ▇. ▇▇▇▇▇ | Chairman | Y | X /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ |
| ▇▇▇▇▇▇▇ ▇▇▇▇▇ | CFO/Secretary | Y | X /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ |
ACTIONS AUTHORIZED. Any one (1) of the
authorized persons listed above may enter into any agreements of any nature with
Lender, and those agreements will bind the Corporation. Specifically, but
without limitation, any one (1) of such authorized persons are authorized,
empowered, and directed to do the following for and on behalf of the
Corporation:
Guaranty.
To guarantee or act as surety for loans or other financial accommodations to
Borrower from Lender on such guarantee or surety terms as may be agreed upon
between the officers of the Corporation and Lender and in such sum or sums of
money as in their judgment should be guaranteed or assured, (the
"Guaranty".
Grant
Security. To mortgage, pledge, transfer, endorse, hypothecate, or otherwise
encumber and deliver to Lender any property now or hereafter belonging to the
Corporation or in which the Corporation now or hereafter may have an interest,
including without limitation all of the Corporation's real property and all of
the Corporation's personal property (tangible or intangible), as security for
the Guaranty, and as a security for the payment of any loans, any promissory
notes, or any other or further indebtedness of PRI MEDICAL TECHNOLOGIES, INC., A
NEVADA CORPORATION to Lender at any time owing, however the same may be
evidenced. Such property may be mortgaged, pledged, transferred, endorsed,
hypothecated or encumbered at the time such loans are obtained or such
indebtedness is incurred, or at any other time or times, and may be either in
addition to or in lieu of any property theretofore mortgaged, pledged,
transferred, endorsed, hypothecated or encumbered. The provisions of this
Resolution authorizing or relating to the pledge, mortgage, transfer,
endorsement, hypothecation, granting of a security interest in, or in any way
encumbering, the assets of the Corporation shall include, without limitation,
doing so in order to lend collateral security for the indebtedness, now or
hereafter existing, and of any nature whatsoever, of PRI MEDICAL TECHNOLOGIES,
INC., A NEVADA CORPORATION to Lender. The Corporation has considered the value
to itself of lending collateral in support of such indebtedness, and the
Corporation represents to Lender that the Corporation is benefited by doing
so.
Execute Security Documents. To execute and
deliver to Lender the forms of mortgage, deed of trust, pledge agreement,
hypothecation agreement, and other security agreements and financing statements
which Lender may require and which shall evidence the terms and conditions under
and pursuant to which such liens and encumbrances, or any of them, are given;
and also to execute and deliver to Lender any other written instruments, any
chattel paper, or any other collateral, of any kind or nature, which Lender may
deem necessary or proper in connection with or pertaining to the giving of the
liens and encumbrances. Notwithstanding the foregoing, any one of the above
authorized persons may execute, deliver, or record financing
statements.
Further Acts. To do and perform such
other acts and things and to execute and deliver such other documents and
agreements as the officers may in their discretion deem reasonably necessary or
proper in order to carry into effect the provisions of this
Resolution.
ASSUMED BUSINESS NAMES. The
Corporation has filed or recorded all documents or filings required by law
relating to all assumed business names used by the Corporation. Excluding the
name of the Corporation, the following is a complete list of all assumed
business names under which the Corporation does business: None.
NOTICES
TO LENDER. The Corporation will promptly notify Lender in writing at Lender's
address shown above for such other addresses as Lender may designate from time
to time) prior to any (A) change in the Corporation's name; (B) change in the
Corporation's assumed business name(s); (C) change in the management of the
Corporation; (D) change in the authorized signer(s); (E) change in the
Corporation's principal
office address; IF) change in the Corporation's state of organization; (G)
conversion of the Corporation to a new or different type of business entity; or
(HI change in any other aspect of the Corporation that directly or indirectly
relates to any agreements between the Corporation and Lender. No change in the
Corporation's name or state of organization will take effect until after Lender
has received notice.
26
|
CORPORATE RESOLUTION TO GRANT COLLATERAL /
GUARANTEE
|
||
|
(Continued)
|
||
| Loan No: 00004 |
Page
2
|
|
CERTIFICATION
CONCERNING OFFICERS AND RESOLUTIONS. The officers named above are duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupy the positions set opposite their respective names. This Resolution
now stands of record on the books of the Corporation, is in full force and
effect, and has not been modified or revoked in any manner
whatsoever.
NO
CORPORATE SEAL. The Corporation has no corporate seal, and therefore, no seal is
affixed to this Resolution.
CONTINUING
VALIDITY. Any and all acts authorized pursuant to this Resolution and performed
prior to the passage of this Resolution are hereby ratified and approved. This
Resolution shall be continuing, shall remain in full force and effect and Lender
may rely on it until written notice of its revocation shall have been delivered
to and received by Lender at Lender's address shown above (or such addresses as
Lender may designate from time to time). Any such notice shall not affect any of
the Corporation's agreements or commitments in effect at the time notice is
given.
IN
TESTIMONY WHEREOF, I have hereunto set my hand and attest that the
signatures set opposite the names listed above are their genuine
signatures.
I have
read all the provisions of this Resolution, and I personally and on behalf of
the Corporation certify that all statements and representations made in this
Resolution are true and correct. This Corporate Resolution to Grant Collateral /
Guarantee is dated June 5, 2008.
| CERTIFIED TO AND ATTESTED BY: | |||
|
|
X
|
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CFO / Secretary of EMERGENT GROUP, INC., | |||
| A NEVADA CORPORATION | |||
NOTE: If
the officers signing this Resolution are designated by the foregoing document as
one of the officers authorized to act on the Corporation's behalf, it
is advisable to have this Resolution signed by at least one
non-authorized officer of the
Corporation.
27